Currency swaps pdf

China and Argentina signed a US$9 billion currency swap deal to boost the crisis-stricken South American country's foreign currency reserves, its central bank announced on Sunday (Dec 2). Chinese President Xi Jinping (right) was received by his Argentine counterpart Mauricio Macri (left) for a state visit after the G20 summit. (AFP/JUAN MABROMATA) Struggling to recover after a currency crisis earlier this year, Latin America's third largest economy sought the help of the International Monetary Fund - which approved a US$56 billion loan package. Now, this latest agreement will "contribute to greater financial stability and also facilitate trade" between China and Argentina, according to the bank's statement. A currency swap sees two parties agree to exchange a certain amount of foreign currency at a pre-determined rate, protecting against fluctuations. Argentina's central bank will be able to draw on these funds in an emergency. The agreement followed the G20 summit in Buenos … [Read more...] about China agrees US$9b currency swap with Argentina

A woman waits in line at a money changer in Jakarta on Feb. 28. (Antara/Puspa Perwitasari) Jakarta (VNA) - The central banks of Indonesia and Australia have agreed to extend the Bilateral Local Currency Swap Arrangement, which is due to expire in December 2018. The agreement will span a period of three years and allow for the exchange of local currencies between the two central banks of up to 100 trillion IDR or 10 billion AUD. Bank Indonesia (BI) Governor Perry Warjiyo said the extension of the agreement will help expand the trade between the two countries because the transactions could be implemented by using the local currencies. The extension of the agreement reflects the wish to strengthen financial cooperation between Indonesia and Australia. Each country could use their respective currencies in the bilateral trade to reduce dependency on US dollar, Parry added. The agreement is part of Indonesia’s efforts to boost the financial market and support the economic … [Read more...] about Indonesia, Australia agree to extend currency swap agreement

Japan and 12 other Asian countries will likely agree to double the amount of funds available under a regional currency swap pact amid uncertainty over the European debt crisis, according to a report. Japan, China, South Korea and the 10 members of the Association of Southeast Asian Nations (ASEAN) are to agree to double the fund from the current $120 billion this month, Japan's Nikkei daily reported on Sunday, citing unnamed sources. The currency swap deal, known as the Chiang Mai Initiative, is designed to prevent a financial crisis in countries with relatively small foreign exchange reserves by giving them a safety net against future liquidity shortages. Currently, up to 20 per cent of the $120 billion in available funds can be used without linkage to loans by the International Monetary Fund. The so-called ASEAN+3 countries are also expected to agree to raise this percentage significantly to prevent the European debt crisis from causing major damage in Asia, the Nikkei said. … [Read more...] about Asian nations to double currency swap deal: report

The first people showed up at the bank long before dawn, forming a line in the cold and the smog and silently waiting for the chance to withdraw their own money. They left more than seven hours later, each holding the handful of bills, worth $60 at the very most, that they'd been allowed to take home.
By midday, the lines snaked back and forth across the parking lot outside the Axis Bank branch in central New Delhi. Occasionally, a policeman carrying a long bamboo club would slap someone who stepped out of line. No one complained. In a crowd like this, largely working-class and uneducated, no one talks back to a policeman. Especially not one carrying a club. "They keep telling us that that this is good, and maybe they're right," said Shahida Parveen, a 36-year-old woman whose family had almost no usable money left. "But I don't see anything good happening." This is just one bank, in one city, in a country of 1.3 billion people, millions of them increasingly desperate for cash amid a … [Read more...] about India’s currency swap sets off endless lines of frustration

The CMIM is a multilateral currency swap contract which is developed from the current CMI bilateral swap network to facilitate prompt and simultaneous currency swap transactions through establishing a common decision making mechanism under a single contract. The US $120-billion contract aims at (i) addressing balance of payment and short-term liquidity difficulties in the region, and (ii) supplementing the existing international financial arrangements. The CMIM will provide financial support through currency swap transactions among CMIM participants in times of liquidity need. Each CMIM participant is entitled, in accordance with the procedures and conditions set out in the Agreement, to swap its local currency with the US Dollars for an amount up to its contribution multiplied by its purchasing multiplier. The successful launch of the CMIM, together with an independent regional surveillance unit to be established, demonstrates the solid commitments and concerted efforts of ASEAN+3 … [Read more...] about ASEAN+3 currency swap contract comes into effect